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$3.4 Million Payment in Deferred Prosecution Agreement with SEC Over FCPA Violations

Tuesday, January 27, 2015
Sandler, Travis & Rosenberg Trade Report

The Securities and Exchange Commission announced Jan. 22 that a Florida-based engineering and construction firm will pay $3.4 million in financial remedies as part of an agreement deferring for two years charges that it violated the Foreign Corrupt Practices Act by offering and authorizing bribes and employment to foreign officials to secure government contracts. Under the deferred prosecution agreement the company has agreed to pay $3.03 million in disgorgement and interest and a penalty of $375,000. In addition, a former officer of the company has agreed to pay a $50,000 penalty to settle charges concerning his participation in this scheme.

According to an agency press release, the former officer offered and authorized nearly $1.4 million in bribes to a local firm owned and controlled by a foreign official to secure two multi-million dollar Qatari government contracts. The foreign official subsequently provided the company’s international subsidiary with access to confidential sealed-bid and pricing information that enabled the subsidiary to tender winning bids for a hotel resort development project in Morocco and a light rail transit project in Qatar. The former officer subsequently offered employment to a second foreign official in return for assistance as the bribery scheme “began to unravel” and the company lost the hotel resort contract.

The SEC notes that the company “ignored multiple red flags” that should have enabled it to detect the bribery scheme at an earlier stage. In addition, even though the bribes themselves were not consummated before the company uncovered the scheme, the company earned approximately $2.9 million in illicit profits because it continued work on the light rail project until a replacement company could be found. Nevertheless, the SEC adds, once the scheme was uncovered the company took quick steps to end the misconduct, voluntarily made witnesses available for interviews, and provided factual chronologies, timelines, internal summaries and full forensic images to cooperate with the SEC’s investigation.

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